In only a few years, hemp morphed from marijuana’s questionable cousin into something so harmless that even places like Family Home Video keeps it on their shelves. This flipping of public sentiment created a hemp frenzy, but what exactly does that look like? Is hemp set to be America’s next big crop? Or is this budding industry sitting on one big green bubble?
In 2007, two North Dakota farmers were granted the first state-issued (but not federally legal) hemp license in 50 years. A little over a decade later, hemp-friendly states issued 16,877 of those same hemp licenses in 2019. This growth, while lucrative, may just be the continuation of a trend. According to Vote Hemp, 2016 saw 15 states adopt hemp growing programs with 9,6490 acres being planted that year. Hemp continued its boom in 2017 with farmers planting 25,713 acres. In 2018, that number tripled 78,176 total acres planted. But in 2019, 511,420 acres have been set aside specifically to grow hemp — a staggering 455% increase from 2018. This giant upswing likely stemmed from the 2018 Farm Bill which removed hemp from the Controlled Substances Act making it just as legal as corn. In the wake of the Farm Bill, 46 states now have hemp farming programs.
All signs point to America padding its hemp supply as the federal government will take several more steps to boost the crop’s future. In 2020, hemp farmers will be eligible for crop insurance. Furthermore, the House of Representatives passed the SAFE Banking Act (321-103) this fall which set out to protect legitimate cannabis businesses (a mostly cash industry) by ensuring their access to banking. While that provision is more impactful for state-licensed marijuana shops, the SAFE Act specifically outlines new protections for hemp and its derivatives. Additionally, an increasing number of hemp grows are earning USDA Organic certification. According to OneCert, the National Organic Program’s third-party certifier, about 600 operations have earned USDA Organic designation — a number that was just 16 in 2017.
While the hemp rush may be multifaceted, the real reason for its explosion may be the strong public demand for the therapeutic uses of CBD (cannabidiol) — a non-psychoactive molecule all cannabis. CBD’s healing properties lead to GW Pharmaceuticals creating the first, and only, FDA-approved CBD isolate (Epidiolex) to treat seizures in children over the age of two.
With Epidiolex on the market, the FDA carries a couple of objectives: CBD is now an active ingredient in a FDA-approved drug, and its addition to the food supply and dietary supplements is illegal under the FD&C Act. This means that CBD products making unlawful therapeutic claims may find themselves in the crosshairs of the FDA. Even more, any CBD isolate not named Epidiolex could get pulled from shelves by the government agency.
The threat of FDA intervention has put a cloud over an already-diminishing CBD isolate market. As a THC-free product, CBD isolates became popular for individuals interested in hemp extracts but could not afford trace amounts of the psychoactive cannabinoid in their systems. This niche market continues to shrink as more people opt for full-spectrum hemp extract, electing fo the “entourage effect” of cannabinoids rather than the narrow therapeutic path of CBD isolates. This dwindling interest sent the price of CBD isolate crashing as its cost per kilogram has been cut in half since its August 2018 highs.
Some believe that hemp as a whole may be due to a similar cooling period to CBD isolates. A streak of lucrative years may hint towards a correction, but hemp has no shortage of support. As Americans continue to add hemp to their health regiments, the US Government seems happy to let the market grow unperturbed provided everyone plays by the rules. And as a national decision on marijuana looms, its innocuous relative could already have carved out a permanent role in the American economy.
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